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Gold steadies off one-week high on dollar rebound

An ingot of 99.99 percent pure gold is cast at the Krastsvetmet non-ferrous metals plant in Krasnoyarsk

By Seher Dareen

(Reuters) - Gold prices were steady below a one-week high hit on Friday as the U.S. dollar firmed, but the non-yielding metal looked set to eke out only a small weekly gain on expectations the U.S. Federal Reserve would scale back its rate-hiking stance.

Spot gold was little changed at $1,754.94 per ounce by 2:00 p.m. ET (1900 GMT). Prices hit a session high of 1,761.17 an ounce earlier and eyed a 0.3% rise for the week.

U.S. gold futures settled up 0.5% at $1,754.

With bullion tracking the dollar and low-volume trading, "it's not going to take much to move the market in either direction and probably going to continue to see more of the same throughout the day," said Jim Wyckoff, senior analyst at Kitco Metals.

The dollar gained 0.2%, making greenback-priced gold more expensive for overseas buyers.

World's top gold consumer China on Friday reported a new daily record for COVID-19 infections, as cities across the country continued to enforce curbs to control outbreaks.

"The COVID situation in China doesn't appear to be getting any better, so that's going to be a front burner issue for the marketplace, not only gold, but for all the markets here for the next couple of weeks," Wyckoff highlighted.

This year's high interest rate hikes from the U.S. Fed have kept a leash on non-yielding gold's traditional status as a hedge against inflation and other uncertainties.

However, traders now expect a smaller 50 bps rate increase at the December meeting after the U.S. central bank's last policy meeting minutes signalled slower pace of interest rate hikes.

"Technically speaking, we failed to break through resistance levels ... so now we're potentially looking for support that's a little lower, closer to $1,730," said Bart Melek, head of commodity markets strategy at TD Securities.

Silver was little changed at $21.52 and platinum inched 0.7% lower to $980.71, both due for weekly rises.

Palladium dipped 1.4% to $1,854.47, heading lower for the week.

(Reporting by Seher Dareen in Bengaluru; Editing by Krishna Chandra Eluri)